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Councilmember Barron's Update on Short-term Rental Ordinance (5/5/22)


Hello, Everyone,

     Well, misunderstandings about the Short-term rental (STR) ordinance continue, so I am hoping this email will clarify things for everyone. We expect the ordinance to be on the agenda next week, but I don't have the final agenda yet, nor the final draft that will be considered. You will all see it when I do in the agenda packet. Let me review how we got here and what the final ordinance to be proposed will look like. One point of clarification---a short-term rental pertains to residential properties rented for less than 30 days blocks of time, usually tourist accommodations. This ordinance in no way impacts traditional rental properties.
     First, why does Blanco need an STR ordinance? Many cities across the country as well as in Texas are struggling with this issue. Historically, homes were built for people to LIVE in. Because of the new concept launched by Airbnb and VRBO, those homes became businesses by renting them to vacationers for short periods, primarily on weekends. As a result, entire neighborhoods in tourist locations have been decimated. Fredericksburg is one such city. Neighborhoods that once housed full-time citizens were turned into weekend lodging centers leaving those homes empty all week long and filled with visitors on weekends.
   What does that mean to a city?   It means the very fabric that makes a community a community is wiped out. There are no homes for citizens to buy or rent so housing shortages result and the population that sustains the community---filling church pews, filling school classrooms, volunteering with local non-profit organizations---dwindles. We are seeing this begin in Blanco as homes are being purchased by investors and used for STRs thereby eliminating those properties from potential use by full-time citizens.
     Not only do we lose the "human" capital, but we also lose financial support for our city services. While investors will say they pay hotel taxes that bring money into the city as well as generate additional sales taxes from visitors, the financial benefit to Blanco citizens is likely much less than if those properties were occupied by full-time residents. Here is why. The ad valorem taxes are the same on the property. The sales taxes that visitors contribute to Blanco can't be consistently measured because those visitors may leave Blanco in the morning to spend the day in Fredericksburg or tour wineries along 290 and do no more than dine out here for one or two meals or make a quick trip to Loews. Still welcome revenue, but a full-time resident will buy gas, groceries, propane, dine out here regularly, etc. day after day. 
     Finally, the Hotel Occupancy Tax collected and paid by STR owners is a restricted tax. It cannot be used to pave streets, hire police officers, or cover any of the administrative costs of operating the city. These funds can be used only for promoting tourism and some historical preservation. The term often used to describe the use of these funds is "heads in beds"--- activities that fill hotel rooms.
     With these things in mind, we are doing what many cities are doing by passing an ordinance to help us control the density of STRs in order to preserve housing availability and the integrity of our neighborhoods and community. So, what does the ordinance do and what does it NOT do? 
Will the ordinance put current STRs out of business?  NO. The most recent draft will go into effect immediately upon passage but with a 75-day moratorium on any NEW permits. During this time, owners of STRs currently operating will have time to apply for a permit with the city by showing proof of such legal operation. Those qualifying entities will be given a permit and required to abide by operating standards. The city staff will map the locations of all current STRs who receive permits to use this as a reference in considering any new permits.
How will new permits be considered?  Every request for a new permit will go before P&Z and City Council for consideration as a special use permit. The council will consider certain things like available parking, buffers, occupancy, input from neighbors, and ultimately the impact on the neighborhood. One of those "impact" considerations is the number of STRs already in the area. The ordinance limits STRs to no more than 20% of the primary residences in a city block or similar geographic area.
What kinds of operating standards will be required?  Owners will be required to provide a 24-hour contact person in case of complaints or emergencies. A contact person must be able to respond on-site within an hour of notification of an issue. Contact information must be posted along with notice regarding noise ordinances and proper garbage disposal as well as instructions for designated parking. The city will require a fire safety inspection of the property.
Where can STRs be located and what kinds of properties quality?  STRs are normally residential properties located in areas zoned for residential use. The property is eligible for consideration if it is located in R1, R2, R3, or R5 zones. Apartments and multifamily dwellings are not eligible to be STRs. This is because these types of properties are likely to be the most affordable housing in our community. I hear from citizens and business owners regularly that their staff cannot find affordable housing in our town. If apartments are built, we want to be sure they are available to people who want to live here. For the same reason, the ordinance prohibits STR permits for duplexes UNLESS owner-occupied. If an owner chooses to live in one unit and use the other for STRs, that is allowed.
Can I get a permit for a guest house on the property where I live?  YES. The 20% restriction applies to the PRIMARY residence. If you live in the home and have a garage apartment, guest house, or other such structure on the property, it can be used for an STR permit regardless of the number of primary structure permits that are in operation in the area if all other standards (parking, occupancy, safety, etc) are met.
Can I sell my permitted STR as a business?  YES, IF you are the original owner/operator. If you were operating the STR when this ordinance goes into effect, you may transfer the permit. After the initial transfer, any future sales will be based upon reapplication subject to approval through the special use permit process.
     I have attempted to answer most of the questions I have received and reflect on the changes that have been made to the original draft of the ordinance. This ordinance attempts to balance the rights of current STR operators with the rights of our full-time citizens living in the neighborhoods where those STRs exist or could exist in the future. It is also an important step in protecting the fabric of our community. I have heard from many STR owners during the last P&Z and Council meetings, and I have heard from many citizens via email and phone calls. This is one of those issues that I ask every one of you to express your views to the entire council publicly during the comment section of our next meeting if possible. If not, please send an email to the Mayor and Council via the city website, and be sure to copy the city secretary for circulation and recording of your comments. As always, call me with any questions. I will be forwarding the Council agenda and final proposed STR draft along with the entire agenda packet as soon as I receive it. 
     As always, thanks for participating in your city's government.